13 April 2014
Muscat: Oman Development Bank (ODB), the Sultanate's specialised institution for funding small and medium enterprises, plans to disburse OMR50 million this year.
Last year, the bank had disbursed OMR35 million, Ahmed Salem Al Harthy, ODB's acting general manager, told Times of Oman.
Highlighting the achievements of the bank, Al Harthy said it was able to bring down non-performing loan (NPL) ratio to eight per cent by end-2013, from as high as 60 per cent in 2004, within a period of ten years.
"This was achieved by strengthening feasibility studies and carrying out follow-up processes. These are the two major factors that helped reduce the NPLs," he added.
The ODB chief also said that the bank has introduced two new products - working capital schemes for farmers and small and medium enterprises - in the recent past.
The working capital for farmers, called Mawsimi, is for one year and is provided at a low interest rate of three per cent by the bank, which has 15 branches across the country.
"We are focusing on small farmers and, therefore, the maximum loan for a single borrower is capped at OMR50,000."
The second product, a working capital scheme for small and medium enterprises, is provided along with technical assistance. "The maximum loan a customer can avail under this scheme is OMR250,000."
Al Harthy also noted that the bank offers interest-free loans up to OMR5,000 to small enterprises for a period of six to seven years.
Denying recent reports that the ODB is considering to launch Islamic finance, he said, "There is no plan to launch Islamic products. We didn't discuss about it. Our loan interest of three per cent is less than the loan rate of Islamic banks."
The ODB's total disbursement surged to reach OMR122 million by the end of 2013, from a mere OMR25 million in 2004.
Al Harthy said on an average, the bank provides loans to 4,500 to 5,000 entrepreneurs every year and a total of 21,000 entrepreneurs have benefited in this way so far. "As much as 85 per cent of our loan is for the SMEs and the remaining 15 per cent is availed of by micro units. We are the leading institution in the banking sector for funding SMEs."
Also, around 42 per cent of the bank's portfolio is for industrial sector, 31 per cent for agriculture and fisheries and the rest is for service sector, which includes health, education and tourism.
"We are now focusing on the tourism sector, which is in line with the government vision," Al Harthy said, adding, "Now the government is focusing on developing the tourism sector (for creating employment opportunities for youths)."
To get in touch with the reporter: businesseditor@timesofoman.com
Muscat: Oman Development Bank (ODB), the Sultanate's specialised institution for funding small and medium enterprises, plans to disburse OMR50 million this year.
Last year, the bank had disbursed OMR35 million, Ahmed Salem Al Harthy, ODB's acting general manager, told Times of Oman.
Highlighting the achievements of the bank, Al Harthy said it was able to bring down non-performing loan (NPL) ratio to eight per cent by end-2013, from as high as 60 per cent in 2004, within a period of ten years.
"This was achieved by strengthening feasibility studies and carrying out follow-up processes. These are the two major factors that helped reduce the NPLs," he added.
The ODB chief also said that the bank has introduced two new products - working capital schemes for farmers and small and medium enterprises - in the recent past.
The working capital for farmers, called Mawsimi, is for one year and is provided at a low interest rate of three per cent by the bank, which has 15 branches across the country.
"We are focusing on small farmers and, therefore, the maximum loan for a single borrower is capped at OMR50,000."
The second product, a working capital scheme for small and medium enterprises, is provided along with technical assistance. "The maximum loan a customer can avail under this scheme is OMR250,000."
Al Harthy also noted that the bank offers interest-free loans up to OMR5,000 to small enterprises for a period of six to seven years.
Denying recent reports that the ODB is considering to launch Islamic finance, he said, "There is no plan to launch Islamic products. We didn't discuss about it. Our loan interest of three per cent is less than the loan rate of Islamic banks."
The ODB's total disbursement surged to reach OMR122 million by the end of 2013, from a mere OMR25 million in 2004.
Al Harthy said on an average, the bank provides loans to 4,500 to 5,000 entrepreneurs every year and a total of 21,000 entrepreneurs have benefited in this way so far. "As much as 85 per cent of our loan is for the SMEs and the remaining 15 per cent is availed of by micro units. We are the leading institution in the banking sector for funding SMEs."
Also, around 42 per cent of the bank's portfolio is for industrial sector, 31 per cent for agriculture and fisheries and the rest is for service sector, which includes health, education and tourism.
"We are now focusing on the tourism sector, which is in line with the government vision," Al Harthy said, adding, "Now the government is focusing on developing the tourism sector (for creating employment opportunities for youths)."
To get in touch with the reporter: businesseditor@timesofoman.com
© Times of Oman 2014
